Administration February 28, 2022

More Social Security Communications Could Bolster Participant Outcomes

A study finds most people do not engage with Social Security’s online portal to factor in the amount of retirement income Social Security will provide until they reach benefit age.

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Internet literacy and educational levels are the chief barriers for workers to use the Social Security Administration’s My Social Security online portal, according to research from the University of Michigan Retirement and Disability Research Center.

The paper, “Mixed-methods Study to Understand Use of the My Social Security Online Platform,” examined barriers to use and experiences with MySSA. The paper was authored by Lila Rabinovich and Francisco-Perez-Arce from the University of Southern California.

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MySSA is the main method for workers to create an account to review earnings history, check current or future benefits, and to access Social Security services.

The analysis suggests that workers currently learn about MySSA primarily when ready to become beneficiaries, and, as a result, users tend to be older.

The authors explain that because younger groups are typically more internet-literate and better prepared to maximize use of MySSA, they may better be able to take advantage of the platform. However, people tend to begin learning about MySSA primarily when they become beneficiaries. 

“Our quantitative and qualitative evidence point to the fact that individuals start using the platform during or after the benefit-claiming process,” the authors state. “Yet one of the most interesting suggestive implications of our findings is that for younger people especially (who, our quantitative analysis shows, are less likely to have a MySSA account), MySSA could be enhanced to be a potentially useful financial and retirement preparedness resource.”

Greater information and resources from the plan sponsor and recordkeeper on claiming Social Security, how to find benefit information and set up a MySSA account could be particularly useful to help  low- and moderate-income participants, because the benefit is expected to replace a larger share of their lifetime earnings.

“Many low-income workers don’t save much outside of Social Security, so that’s another reason why Social Security so important,” says Rich Johnson, senior fellow and director of the Program on Retirement Policy at the Urban Institute, a Washington, D.C.-based think-tank for economic and social policy research.

Report Findings

The authors interviewed 24 individuals about their views and experiences with online transactions and with Social Security for their perceptions of the MySSA platform.

The report’s qualitative analysis found four reasons for not creating a MySSA account: lack of awareness of MySSA; no perceived relevance/need; security and privacy concerns; and low internet/computer literacy.

Participants who did use the website found the information on the platform relevant. This was true for participants who currently receive benefits and those who do not, according to the paper.

Working individuals and non-retirees also found the information useful, the authors state. Non-retirees appreciated the retirement benefit information, with one participant who did not realize that full retirement age was 67. 

“Our findings suggest that for younger people especially, MySSA could be a potentially useful financial and retirement preparedness tool,” the paper states. “We find that a key challenge to MySSA use is getting people to create an account in the first place and not their retention once they create an account.”

Participant Communications

The findings suggest that plan sponsors and recordkeepers can assist with more resources and information on Social Security generally, and tips for how to maximize an individual’s claim, according to Johnson.

“One of the implications of this study is that employers and plan sponsors could do more to encourage their participants to investigate Social Security and to investigate how much they should be expecting from the program,” he says. 

Plan sponsors could, in participant quarterly statements, provide information that highlights the importance of Social Security, and advise that savings in the retirement plan may not be sufficient for retirement income to alleviate longevity risk, Johnson adds.

Reaffirming the importance of Social Security awareness and knowledge could help retirement plan participants become better prepared by alerting workers to tools available and how to use them, he says.

“They can go on and see how much they can expect. The  tool can also show them how much more people would get if they work[ed] longer … not enough people realize that if they delay claiming–if you work a little bit longer–you could significantly increase your benefits,” he explains. “Most plan sponsors really don’t think much beyond their own plan in helping participants and don’t know how much the participant is going to get, but having the participants just spend a few minutes to do that could be a really important development.”

Steve Vernon, president at Rest-of-Life Communications, a provider of workplace retirement communication and financial education programs and consultant at the Stanford Center on Longevity, Financial Security Division, adds that trusted messengers like famous athletes or celebrities could be used to urge workers to learn about Social Security.

“We need to use … common marketing strategies and techniques like you’re selling soap and get the word out about these tools in a marketing way,” he says. “People have a lot of stuff competing for their attention, and I think MySSA needs to compete for that attention.”

He adds that plan sponsors and recordkeepers can benefit from such a deliberative approach to boost participant outcomes.

“The tools are there, but what’s missing is a helper, a navigator,” he says. “How do you navigate, what do you do first? Also just drawing people’s awareness to it. The tools that are out there for Social Security are great, they just need more awareness, and then maybe a step-by-step approach as to what you do first, what you do second and what you do third.”

Financial advisers should use similar tactics to work with the plan sponsor and plan recordkeeper, as well. 

Financial advisers should encourage their clients to use MySSA because of the trust they have developed with the adviser, Vernon says.  “To me, it’s just part of simple blocking and tackling because you have got to get the word out and use the employer, use 401(k) recordkeepers, use financial advisers, use all the above.”

Benefits February 28, 2022

Ways Employers Can Support Caregiver Employees

The provision of targeted benefits for caregivers creates employee loyalty and good will, while helping to reduce stress and increase productivity.

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Jessica Tuman took on her role as head of the Voya Cares program more than five years ago, and while discussing her work during a recent interview with PLANSPONSOR, she said the experience has been both eye opening and gratifying.

In particular, Tuman says, the COVID-19 pandemic has put a clear spotlight on the way caregiving and the health and welfare of a worker’s family bear directly on their ability to succeed and thrive personally and professionally.

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“I think one thing the pandemic has helped to demonstrate is that we are all at some point going to be in a situation where we have to care for an elderly parent or a sick family member,” Tuman says. “It has also demonstrated the acute challenges faced by those people in Generation X, who are really in a sandwich caregiver situation right now, having to support both their own children and aging parents.”

Tuman points to Voya Cares research showing about one in five American employees is now a caregiver, while also citing statistics showing the employers tend to underestimate how many of their own people are in a caregiving situation. And while many employers say they would like to do more to address the needs of this population, they say the biggest barrier to doing more is making a compelling business case to invest in additional relevant benefits.

“One positive aspect of the Great Resignation, as it has come to be called, is that it is helping employers to see the inherent value in the types of ancillary benefits that are going to be relevant and useful to caregivers,” Tuman notes. “Not only do these benefits create employee loyalty and good will, but they also can reduce employee stress and help to increase productivity. In that sense, there is a very strong business case for considering them.”

Voya Cares research show there is a significant physical, emotional and financial impact on caregiving employees and employees with disabilities. In one survey, four out of five caregiving employees said that they experienced increased stress or anxiety as a result of their dual roles, and a majority also report using sick days, personal leave or vacation time to provide care. As a result, common issues reported by caregivers include trouble sleeping, depression and anxiety.

“In addition, compared to the general population of employees, caregivers and employees with disabilities and special needs are in a more uncertain financial situation,” Tuman warns. “More than half of caregivers and employees with disabilities surveyed are concerned that the money they have or the money they will save won’t last.”

Tuman says this information should galvanize employers to take actions to support their many caregivers. Doing so can help them substantially reduce employee replacement costs and prevent productivity losses.

“It is costly and time consuming for employers to replace employees, and caregivers can feel like they do not have a choice but to leave a position, if they do not feel like they have the support or flexibility they need to juggle caregiving and work,” Tuman warns. “Additionally, it is common for caregivers to need to take time off to provide care. One in five caregivers has quit work entirely due to caregiving demands and feeling like they cannot satisfy the demands of both roles.”

Tuman emphasizes that none of these points suggest employing caregivers and people with disabilities has a negative effect on a company. In fact, research has shown that a majority of employee caregivers are senior level and likely some of the highest-performing talent in an organization.

When asked to rate which benefits are most important to them, employees list three typical top choices:good medical insurance, a generous retirement plan and ample paid time off. However, in addition to these, there are other benefits and resources that especially appeal to caregivers and employees with disabilities and special needs. These benefits include:

  • Legal benefits. More than half of employees with disabilities and special needs and caregivers rate this as an important benefit, as they may have additional considerations that drive demand for legal services.
  • Health saving accounts and flexible spending accounts. All employees, especially individuals with disabilities and special needs and caregivers, value tax-advantaged benefits that help them save for current and future expenses.
  • Disability and long-term care insurance. A large majority of caregivers and individuals with disabilities (80%) rate disability insurance and long-term care insurance as important benefits.
  • Assistance finding providers and resources. Offering a care concierge benefit that helps caregivers find service providers and resources in their area can help relieve the stress and time demands that may otherwise detract from productivity.

“I can tell you, as a manager myself, just how important some of these benefits can be to individuals who are feeling the caregiver squeeze,” Tuman says. “Providing support and flexibility is one of the best ways to build employee loyalty. It’s not even about giving them so much extra money or time off. It’s the fact that they know their employer has their back and that they can get the emotional support they need.”

In addition to addressing these issues, Tuman says, Voya Cares is also focusing on a category of employees called “career extenders.” These are people working past what would be considered a typical retirement age, as they are either not financially ready to retire or voluntarily continuing a successful career. Voya Cares’ research shows nearly 20% of Americans over age 65—a total of 10.6 million people—are either working or looking for work, representing a 57-year high.

“These employees are hoping for support with efficiently accessing things like Medicare and Social Security, while also navigating their need to draw required minimum distributions from retirement plans,” Tuman says. “The financial picture they face can be quite complicated, and employers should be taking steps to help them.”

These steps include providing older employees with targeted education and access to high-quality financial advice. Further, for those working past retirement age who wish to accumulate more retirement savings, individual retirement accounts offer a few ways to build their nest eggs. Catch-up contributions, available to those age 50 or older, increase the amount that career extenders can save in IRAs. Often overlooked, these additional contributions above the standard limit can make a big difference later in life.

Many career extenders have multiple streams of income, potentially from a pension or Social Security, coming on top of their earned income. As a result, they may have excess cash after paying for their monthly expenses. As such, contributing to an IRA may be an option to invest a portion of their additional cash flow, while benefiting from tax reductions.

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